CHAPTER IV

REFUSAL TO DEAL

§ 17. Refusal to deal.

18. Contracts, etc., imposing restrictions on right to deal.

19. Inducing refusal to deal.

20. Relation justifying inducing refusal to deal.

21. Relation among body of tradesmen desiring protection against delinquent debtors.

22. Malicious intent.

23. Inducing refusal to deal, in pursuance of combination.

§ 17. Refusal to deal.-Authority seems scarcely needed for the proposition that there is nothing inherently or necessarily illegal in refusing to deal, or to continue to deal with another.1 "The refusal to maintain trade relations with any individual is an inherent right which every person may exercise lawfully, for reasons he deems sufficient or for no reasons whatever, and it is immaterial whether such refusal is based upon reason or is the result of mere caprice, prejudice, or malice. It is a part of the liberty of action which the constitutions, State and Federal, guarantee to the citizen.

1 See Master Builders' Assoc. v. Domascio, lu Colo. App. 25; 63 Pac. 782 (1901); Cleveland, C. C. & St. Louis Ry. Co. v. Jenkins, 174 Ill. 398, 404; 51 N. E. 811, 813; 62 L. R. A. 922, 926; 66 Am. St. Rep. 296 (1898); Klingel's Pharmacy v. Sharpe, 104 Md. 218; 64 Atl. 1029; 7 L. R. A. N. S. 976; 118 Am. St. Rep. 399 (1906); Walsh v. Association of Master Plumbers, 97 Mo. App. 280, 289; 71 S. W. 455, 457 (1902); Lindsay v. Montana Federation of Labor, 96 Pac. 127 (Supm. Ct. Mont., 1908); Mills v.

It is not within the power

U. S. Printing Co., 99 App. D. 605, 609; 91 N. Y. Suppl. 185, 188 (1905); Collins v. American News Co., 34 Misc. 260; 69 N. Y. Suppl. 638; affirmed in 68 App. D. 639; 74 N. Y. Suppl. 1123 (1902); Wills v. Central Ice & Cold Storage Co., 39 Tex. Civ. App. 483, 491; 88 S. W. 265, 269 (1905); Transportation Co. v. Standard Oil Co., 50 W. Va. 611; 40 S. E. 591; 56 L. R. A. 804; 88 Am. St. Rep. 895 (1902). See, however, People v. Duke, 19 Misc. 292, 298 (N. Y. Co. Gen. Sess., 1897).

"2

of the courts to compel an owner of property to sell or part with his title to it, without his consent and against his wishes, to any particular person." 2 A fortiori there is nothing illegal in refusing to deal with another save under certain conditions.3 § 18. Contracts, etc., imposing restrictions on right to deal.— If I have the right to refuse to deal or continue to deal with a particular person, have I not the right to bind myself by contract not to deal or continue to deal with him? Whether such contract is void as creating an unlawful restriction upon competition will be elsewhere considered. Apart from this what legal right is violated thereby? Not mine, as already seen. Nor is that of the person with whom I bind myself not to deal. He had no right to deal with me, and consequently my contract deprives him of no right. Nor does it seem material that such restriction upon the right to deal is contained, not in a contract in the ordinary form, but in, for instance, a statute or ordinance. A contrary conclusion has been frequently reached, however, apparently from a failure to recognize the distinction between a restriction placed upon one's own right to refuse to deal, and a restriction placed upon the right of another to refuse to deal.*

2 Locker v. American Tobacco Co., 121 App. D. 443; 106 N. Y. Suppl. 115 (1907; so held as to refusal of sales agent with the knowledge of the principal, to sell the products of the latter). For a similar expression of view, see Lewis v. HuieHodge Lumber Co., 121 La. 658; 46 So. 685 (1908). See also Booth v. Burgess, 65 Atl. 226, 230 (Ct. Ch. N. J., 1906; see as to right to continue to refuse to deal).

3 In Tanenbaum v. N. Y. Fire Ins. Exchange, 33 Misc. 134; 68 N. Y. Suppl. 342 (Supm. Ct., Sp. T., 1900), an agreement had been made among members of an exchange composed of companies and others engaged in the fire insurance business, to refrain from paying commissions to a broker offering in

surance, unless approved by the exchange and possessing a license issued as evidence of such approval. Such agreement was held to furnish no cause of action in favor of a broker unwilling to conduct his business in the manner required of a licensee, and consequently having no license.

4 The question has arisen in determining the validity, for instance, of provisions in municipal contracts or ordinances restricting employment to "union labor," as distinguished from "non-union labor." Such provisions were held invalid in Adams v. Brenan, 177 Ill. 194; 52 N. E. 314; 42 L. R. A. 718; 96 Am. St. Rep. 222 (1898); Fiske v. People, 188 Ill. 206; 58 N. E. 985; 52 L. R. A. 291 (1900);

§ 19. Inducing refusal to deal.-Scarcely less clear than the right to refuse to deal seems the right to induce refusal to deal. At any rate, under certain conditions such right seems beyond question. Thus there can, especially in case of response to a request for advice, be nothing inherently or necessarily illegal in inducing a person not to patronize this or that doctor or grocer. Such inducement or advice is a part of the very web and woof of ordinary neighborly and social intercourse. In a sense, injury is done by such act of inducement, in causing a loss of patronage. It seems at least doubtful, on principle, whether such injury is not in any view too remote and contingent for the law to take into consideration.

5

Woodward v. Boston, 32 Am. Law Rev. 624 (Super. Ct. Mass., 1898); Lewis v. Board of Education of De troit, 139 Mich. 306; 102 N. W. 756 (1905). See also State ex rel. Robert Mitchell Furniture Co. v. Toole, 26 Mont. 22; 66 Pac. 496; 55 L. R. A. 644; 91 Am. St. Rep. 386 (1901). Analogous are People ex rel. Rodgers v. Coler, 166 N. Y. 1; 59 N. E. 716; 52 L. R. A. 814; 82 Am. St. Rep. 605 (1901); People ex rel. Treat v. Coler, 166 N. Y. 144; 59 N. E. 776 (1901). See articles in 63 Alb. Law Jour. (1901) 300, 475 on "The Constitutional Right of Refusal to Deal." See also as to validity of agreements for employment of union labor only, §

54.

5 Reynolds v. Plumbers' Protective Assoc., 30 Misc. 709; 63 N. Y. Suppl. 303 (Supm. Ct., Tr. T., 1900; citing text); Foster v. Retail Clerks' Protective Assoc., 39 Misc. 48, 56; 78 N. Y. Suppl. 860, 866 (Supm. Ct., Sp. T., 1902).

See observations of Lords Herschell and James, in Allen v. Flood, App. Cas. (1898), 1, 126, 179. In Ulery v. Chicago Live-stock Ex

change, 54 Ill. App. 233 (1894), the action of a live-stock exchange in requesting its members not "to employ the plaintiff in the livestock commission business, or to transact any business with him at the Union Stock Yards," was held not unlawful, the court saying: "A person, with or without reason, may refuse to trade with another; so may ten or fifty persons refuse. An individual may advise his neighbor or friend not to trade with another neighbor; he may even command, when the command amounts only to earnest advice."

In Guethler v. Altman, 26 Ind. App. 587; 60 N. E. 355; 84 Am. St. Rep. 313 (1901), an action was held not to lie against members of a school board or their employees for inducing school children not to patronize a certain dealer, notwithstanding allegations of "threats" and "intimidation."

See § 27; Hughes v. McDonough, 43 N. J. Law, 459; 39 Am. Rep. 603 (1881). To the contrary, however, seems Moran v. Dunphy, 177 Mass. 485; 59 N. E. 125; 52 L. R.

§ 20. Relation justifying inducing refusal to deal.-If the right to induce refusal to deal be not an absolute one, that is, if it be necessary that there exist some special circumstances of justification for such act of inducing, we may apply the test already stated, namely, whether the act was the natural incident or outgrowth of some lawful relation. We might perhaps con